On January 15, 2019 the Ontario Chamber of Commerce presented its provincial pre-budget submission to the Standing Committee on Finance and Economic Affairs. The report includes 13 tangible recommendations for the upcoming provincial budget, aimed at building a stronger Ontario and creating a business climate that encourages growth. The report calls on the Government of Ontario to prioritize small business tax reform, strategic infrastructure investment, and value-based procurement in Budget 2019.

The following are the key areas of recommendation:

  • tax competitively;
  • enhance fiscal capacity for municipalities;
  • address Ontario’s infrastructure deficit; and
  • adopt sustainable spending methods. 

Read the full report here.

See below for a synopsis of the report. 

Tax Competitively

Last year 46 percent of businesses in Greater Sudbury cited corporate taxation as a high priority issue for their business; similarly, 48 percent of Ontario businesses indicated they were not confident in the province’s economic outlook and a majority of them cited high tax rates as a reason. Recent tax reform in the United States has further exacerbated those concerns and eroded Ontario’s competitive edge.

Building a more competitive tax environment is critical to fuelling investment, innovation, and economic growth across the province. In light of this, the Ontario Chamber of Commerce identified five key recommendations that focused on fiscal sustainability and long-term economic prosperity. 

Key Recommendations:

  • Establish tougher penalties for non-compliance.
  • Create a variable small business deduction and delay taxation on corporate income growth to overcome Ontario’s scale-up challenge.
  • Maintain the current mining tax rates for remote, non-remote, and diamond mining operations.
  • Preserve provincial tax exemptions on employer health and dental plans.
  • Modify the Municipal Accommodation Tax to protect tourism industry competitiveness.

Enhance Fiscal Capacity for Municipalities 

In its 2018 Fall Economic Statement, the Government of Ontario rightly recognized that municipalities have real, tangible impacts on the day-to-day lives of Ontarians. Supporting the fiscal capacity of municipalities is essential to ensuring that individuals and businesses across the province are provided with the conditions they need to prosper.

The report calls on the Government of Ontario to take further action to support the fiscal capacity of municipalities. 

Key Recommendations: 

  • Gradually increase the Heads and Beds Levy on institutions.
  • Fix the interest arbitration system for fire and policy services.

Address Ontario’s Infrastructure Deficit

Ontario’s infrastructure deficit is limiting economic development, and the problem is further pronounced in Northern Ontario. Northern Ontario’s broadband, passenger rail, and highway infrastructure remains subject to a critical funding deficit, preventing businesses from tapping into value chains and efficiently getting their goods and services to the provincial and national markets and preventing communities from building robust connections with the rest of the province.

The report encourages the government to prioritize investments in technology and transportation infrastructure in Budget 2019. 

Key Recommendations: 

  • Leverage the private sector to expand broadband access.
  • Restore passenger rail in Northern Ontario by partnering with the Canada Infrastructure Bank.

On December 3, 2018, the Greater Sudbury Chamber of Commerce, in partnership with the Ontario Chamber of Commerce, co-released a report, entitled Moving Forward: Towards a Strategic Approach to Ontario’s Transportation Needs (Part I), on strategies to strengthen our critical transportation infrastructure. Read the report here

Adopt Sustainable Spending Methods

Given the severity of Ontario’s public debt, the chamber network has encouraged the Government of Ontario to reconsider the approaches it takes to spending and explore adopting more fiscally sustainable models. Only then can Ontario achieve long-term fiscal balance without undermining critical investments in the economy. While eliminating or reducing the provincial debt will a longer timeline than what can be achieved within Budget 2019, implementing spending reforms now is critical to a sustainable spending strategy. 

Key Recommendations: 

  • Use value-based procurement to more effectively spend taxpayer money.
  • Implement user-pay models and means testing for certain government services.
  • Direct business support to where it is needed most.
  • Leverage technology to increase public sector cost efficiency.